Author

Abstract

The topic of convergence is at the heart of a wide-ranging debate in the growth literature, and empirical studies of convergence differ widely in their theoretical backgrounds, empirical specifications, and in their treatment of cross-sectional heterogeneity. Despite these differences, a rate of convergence of about 2% has been found under a variety of different conditions, resulting in the widespread belief that the rate of convergence is a natural constant. We use meta-analysis to investigate whether there is substance to the 'myth' of the 2% convergence rate and to assess several unresolved issues of interpretation and estimation. Our data set contains approximately 600 estimates taken from a random sample of empirical growth studies published in peer-reviewed journals. The results indicate that it is misleading to speak of a natural convergence rate since estimates of different growth regressions come from different populations, and we find that correcting for the bias resulting from unobserved heterogeneity in technology levels leads to higher estimates of the rate of convergence. We also find that correcting for endogeneity of the explanatory variables has a substantial effect on the estimates and that measures of financial and fiscal development are important determinants of long-run differences in per capita income levels. We show that although the odds of a study being published is not uniform for studies with different p -values, publication bias has no significant effect on the conclusions of the analysis. Copyright Blackwell Publishers Ltd, 2005.

Download full text from publisher

File URL:http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=joes&volume=19&issue=3&year=2005&part=nullFile Function: link to full textDownload Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to search for a different version of it.

More about this item

Statistics

Corrections

All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jecsur:v:19:y:2005:i:3:p:389-420. See general information about how to correct material in RePEc.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

We have no references for this item. You can help adding them by using this form .

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through
the various RePEc services.